March 7, 1930

CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Hon. R. B. BENNETT (Leader of the Opposition) :

Mr. Speaker, I hardly think that is in order. An order in council cannot be superseded by a treaty; the order in council either must be rescinded or allowed to remain. It cannot be superseded, and the effect of the order in council was to make the Australian treaty applicable to New Zealand. I submit that this subamendment is not in order at all for that reason. The motion is to go into supply; to that motion an amendment has been moved, which amendment is now before the house. The amendment proposes the rescission of an order in council and that immediately thereafter steps be taken to negotiate a treaty. The subamendment is that the order in council will be superseded by a treaty, which of course is nonsense. That is all it is; it cannot be done.

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LIB

Lucien Cannon (Solicitor General of Canada)

Liberal

Hon. LUCIEN CANNON (Solicitor General) :

With all due respect to the hon. leader of the opposition, Mr. Speaker, I think he has given in the concluding remarks which he has just addressed to the chair a definite answer to his opening remarks. The only thing I may say is that certainly "superseded" means the removal of something which now exists by something else and I do not. see much in the point raised by my hon. friend.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

If the intention were to

do what my hon. friend indicates then he would be right, but that is not the intention of the government. The intention of the government is not to rescind the order in council forthwith, but we agree that it is desirable that the order in council, as soon as possible, should be superseded by a definite treaty, and we must negotiate in order to be able to make such a treaty.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

In my view the point of order is not well taken.

Australian Treaty-Mr. Stirling

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CON

Grote Stirling

Conservative (1867-1942)

Mr. GROTE STIRLING (Yale):

Mr. Speaker, I desire to offer a few remarks on this question of the New Zealand order in council, as one who in the debate during the session of 1925 and in subsequent debates on this question endeavoured to point out, as did my colleagues, the dire results which we foresaw must follow with regard to one of the most important branches of the agricultural industry in this country if this trade arrangement with our sister dominion were carried through. However, in spite of the representations which we endeavoured to make on those occasions, the government forced through the terms of this treaty and extended them to our sister dominion of New Zealand. We then understood that such action was not sought by New Zealand, and this is the first occasion on which I have ever heard that New Zealand did seek those benefits.

We have endeavoured on various occasions to ascertain from the government what Canada received from New Zealand in return, but to this day we have not heard that Canada has been beneficially treated by New Zealand in return for these preferences. Few there must be who would fail to desire an enlargement, an extension, or the creation if they do not already exist of trade arrangements with our sister dominions, but surely any government which endeavours to advance along that line must have the welfare of the Canadian industry as a basis for their negotiations. In this matter Canada once more has done all the giving, but Canada has received nothing in exchange. We do not know whose advice the government may have sought at the time they blunderingly went forth bearing gifts to New Zealand; if they sought the advice of the officials of the Department of Agriculture, those officials have proved themselves false prophets; if they sought counsel from each other they surely must be condemned for not having sought, from the industry itself, the advice which they needed. We know that they did not consult the National Dairy Council; we had that from the secretary of that council two years ago. The National Dairy Council is one of those bodies which came into existence, part of whose duties was to be a bureau of information on the dairy industry. The National Dairy Council is a body to whom the government might very wisely turn when seeking advice as to the effects of any proposed policy upon the dairy industry. Although the government did not seek that advice, we are perfectly aware of the action taken by the council for we receive the annual reports of that body. I

will draw the attention of the house to a few short extracts from the reports of the last year or two.

In 1927 the council submitted an expression of their view to the Privy Council of Canada, which appears upon page 7 of the report of that submission. The effect of the extension to New Zealand of these terms was fully discussed by the members of the council, and the executive committe was unanimously instructed to make representation to the government along certain lines. This report reads:

The executive therefore respectfully requests as follows: , ,

1. That the order in council applying schedule 2 of the Australian trade agreement to New Zealand be rescinded at once;

Although the advice of the National Dairy Council had not been sought, in 1927 they sought the government and presented the collective views of the dairymen of Canada. At page 13 of the annual report of the proceedings of that council for 1927, we read:

It is now generally regarded that the reduced make of butter this season is, in a measure, due to the large quantities of butter imported from the two countries in question. Particularly is this true this fall, as the offering of large quantities of New Zealand butter, laid down at Halifax and Vancouver, at a comparatively low price will be a hard blow to our winter dairying this season.

That again expresses the view of the dairymen. The chairman, after referring to the effects which had been produced in the prairie provinces from 1925 to 1926, proceeds as follows:

Now, with not such a good wheat crop, with wheat at only half the 1915 price, with no shortage of labour. Saskatchewan takes a bump of four million pounds in one year. Surely, then, we are justified in regarding this treaty as the prime cause of the trouble.

Again the views of the dairymen of Canada are expressed. Then we come to the hon. Minister of Agriculture (Mr. Motherwell) who spoke as follows:

Now you have had two years operation of the treaty, the question is: What are you going to do about it?

That is a question we have heard many times from the lips of the hon. Minister of Agriculture. The report continues:

I have no statement to make in regard to it, except that, when publicly attacked, I am defending the Australian treaty. I also want to point out that the clause as to six months notice of change is always there to be availed of. and I do not know of any body of men whose natural duty it would be more than yours to look after this. You are tlie spokes-

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Australian Treaty-Mr. Stirling

men, and as you have said, "the watchdog" of the dairying interests of Canada, and if there is anything to be done the dairymen of Canada would naturally look to you to do it.

The Minister of Agriculture considers that this council is the one to express the views of the dairying industry, and yet they were never consulted before these terms were given to New Zealand. A little farther down the minister continues:

Let me draw your attention to another difficulty, since we are pointing out difficulties in connection with the Australian treaty. Our western people, as you know, are proverbially low-tariff people, and the moment they begin to agitate for a raising of duty, even though it is only to get it back to where it was. they are put in the embarrassing position of being high-tariff on butter, but low-tariff on farm implements. It is no joke to take this position. I suppose it can be done, but it requires explaining. So you will sympathize with us all. I am sure you feel it yourself.

So much for the Minister of Agriculture. Then turning to the report for the year 1928, we find a resolution put before the convention, which reads as follows:

That the National Dairy Council reaffirms its adherence to the principle of adequate protection for the dairy industry on butter and eggs.

Then the chairman proceeds as follows:

What the resolution says is "adequate protection for the dairy industry"; it is not the theory of protection in the abstract, it is not an organization trying to voice universal high tariff or protection, but it is the farmers asking that their product be protected.

, If you shy at the word "protection," and if you think that interferes with some political shibboleth of the west, then of course you won't pass it, but if you regard it as a plain statement of the fact that the dairy industry is entitled to its share of protection, then you will adopt it.

The resolution was adopted. Then, turning to the report of this year, we find on page 11 the imports of butter from New Zealand. These figures have been quoted before in this debate, but I desire to draw the attention

of the hon. members to the gross figures. The

imports are given for the are as follows: fiscal years, and

Year Pounds

1925

1926

1927

1928

1929

That is 150 times what it was six years

ago. There is no other industry in this

country which could stand up under such a blow. The Minister of Finance suggests that if you propose to start in negotiations with another person, it is a poor start to knock

that person down first. But I would suggest that when a government has as part of its duty the fostering of industry within the country, it is a sad thing to drive a crushing blow between the eyes to that industry, and then, *when it is suggested that the means wherewith that crushing blow was delivered, should be withdrawn, to reply, as seems to be the answrer he would make: We must not be provocative to a sister dominion. It appears to me absolutely necessary that we, on behalf of this industry, must indicate now to our sister dominion that this must stop forthwith and proceed from that stage to negotiate a treaty. Glad we are to know to-day for the first time that that sister dominion desires to have a trade agreement with us.

Turning over two pages in this year's report, we come to what the secretary's report has to say on the export of cows. Pointing out that for seven months in 1928 and for seven months in 1929, an average of 2,000 cows was exported per month, it goes on to say:

The United States continues to buy our cows in large numbers. During the past summer there has been a big demand and there are those who are afraid of the outcome.

Surely every dairyman in Canada is to-day afraid of the outcome. It is not at all impossible that the Prime Minister (Mr. Mackenzie King) is afraid of the outcome. We know his Minister of Agriculture (Mr. Motherwell) now and for several years past has been afraid of the outcome. His deputy minister unquestionably is afraid of the outcome. The mover and the seconder of the amendment have both referred to the letter which he has sent out recently accompanying an excellent questionnaire in which he, the executive officer of the Department of Agriculture, is endeavouring to find out from the people injured what is the matter with their industry. There is no doubt that everyone who has looked into the matter realizes that something is seriously wrong with this industry, and for the Minister of Finance to tell those of us who took part in prophesying exactly what would result from giving those terms to New Zealand, that we are merely delivering political speeches, is scarcely a worthy remark to fall from the lips of the minister. Who would not be concerned? The Departments of Agriculture, both Dominion and provincial, for years past have been ploddingly, untiringly, carrying on the arduous work of building up this most valuable portion of agricultural industry in Canada. They have preached to the farmers the necessity of building up their herds, of increasing their pig pens, of improving the quality of their butter, cheese and bacon. But now we find ourselves in the position of having, under the policy of the gov-

Australian Treaty-Mr. Adshead

eminent, allowed that industry to slip back into the situation it occupied on a far lower rung of the ladder than that which it has occupied, and from now on we must start in, knowing thankfully that Canada has the resiliency necesary, to endeavour to build up what we have lost, to regain those herds again, to attempt to obtain those markets which we have lost and to demonstrate to the world what the world learned from us years ago, namely, that in quality there is no other agricultural produce in the world to vie with that of Canada. To say that we must not withdraw this treaty is surely a quibbling in terms. It is absolutely necessary, if this industry which has received this crushing blow, is yet to be saved, that that entry of butter, even though it be from a sister dominion, should cease forthwith. Without that the down grade will continue until this industry is but a shadow, and the most serious part of the injury done is not merely that for the time being our dairy farmers are suffering, but that if that industry be destroyed altogether, we shall have one more instance of the fact that we become dependent entirely upon the produce of other countries.

That will not be satisfactory in any province of the Dominion, and whilst dairying is but one of the many industries carried on in British Columbia, in my part of that province it is looked upon as one of the most valuable branches of agriculture because it builds up the land; it tends to form homes and it produces something which we should rightfully suppose could find its market in the domestic market of Canada. We do not know when the government will choose to consult the people on its record, but what a record there will be for the government to carry to the farmers of Canada in this question of the dairy industry ! So far as we on this side of the house are concerned, we shall be interested when the day comes when we can expose to the people of Canada the government's record in this matter.

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LAB

Herbert Bealey Adshead

Labour

Mr. H. B. ADSHEAD (East Calgary):

I

wish to make a few remarks chiefly in regard to the butter industry, rather than any other part of the motion. First of all, I want to draw the attention of the house to a rather peculiar situation. Last year when the late Hon. Mr. Robb was Minister of Finance, this comer, the United Farmers of Alberta comer, moved a subamendment to the amendment of my hon. friends to the right. I asked Mr. Robb why he could1 not adopt that particular subamendment, because it was right in line with his policy. "Well" he said, "I fully agree with you that we are in line with that policy,

but the motion before the house is that the Speaker do now leave the chair, and if we adopt that particular amendment it would simply mean, like all other amendments, that the Speaker do not leave the chair." In this case we have a subamendment moved by our hon. friends on the right of the Speaker to the amendment which my hon. friends on this side have moved. If that carries, if what Mr. Robb said is true, then the government are absolutely defeating themselves. It seems to me that is a rather peculiar situation, and I should like to see how we are going to get out of it. Those who have made their bed must lie in it; that is all I cam say about the matter.

I was very much interested in the speech delivered by the hon. member for Dufferin-Simcoe (Mr. Rowe). He told us that in his day he had milked some twenty-five cows. I thought of the old historic custom that when two armies met in battle, a champion of each side would go out into the centre and they would have a little duel of their own. As I am a member from the west and have in my day milked twenty-five cows on my homestead -I did so once all alone, but never again- and he has milked as many in Ontario, perhaps we had better enter into a milking contest. I will put on a pair of overalls, and so will he and we will milk one or two cows. That will settle the question and get us out of the difficulty.

This motion is a double-edged one. Not only is it a motion to consider the question of butter and its relation to the Australian and New Zealand treaties, but it is also a want of confidence motion in the government on that point as well as a general want of confidence motion in the government. It seems to me that my hon. friends have put the cart before the horse. They have stated that the introduction of New Zealand butter has caused a far less production of Canadian butter because of importations. I rather think the situation is the other way about: that it is the decrease of production of Canadian butter that has caused the importation of New Zealand butter. That is my experience so far as the west is concerned.

In the west in the early times we had to milk cows. The product of a few cows would buy us our groceries and other necessities of life. In the district in which I lived at that time, we could not raise wheat because the land had not been sufficiently broken up and there were summer frosts. At the time I left I was milking about twenty-five cows. To-day that land is all broken up and it is growing wheat. There are not four cows in the whole half section. That is one of the causes of

3S0 COMMONS

Australian Treaty-Mr. Adshead

the decreased production of butter and milk in the west. Wheat production has extended so much because the farmers thought that it was easier. The dairy farmer has to milk his cows twice a day, seven days a week, and fifty-two weeks in the year, and so a good many of them concluded that it would be easier to grow wheat than to milk cows. I am glad to say that to-day there is a very distinct movement back to dairying and mixed farming, which should ultimately prove beneficial. The milk industry itself has developed. Calgary has grown to a city with a considerable population; we have also in the province the cities of Edmonton, Medicine Hat, Lethbridge, Red Deer and others, all of which are taking large quantities of milk, and that milk, of course, is not made into butter. In Calgary the dairymen have formed themselves, not into a butter pool, but into a milk pool and are rivalling the other dairies in supplying milk direct from the farmer to the consumer-new milk fresh from the cow every morning. When they get twelve cents a quart for their milk, that is better than fifty cents a pound for their butter, which is surely high enough.

There appears to be a variety of opinions on this butter question, even amongst the dairymen themselves. I have before me the pamphlet mentioned by my hon. friend the Minister of Finance (Mr. Dunning) in connection with the butter and cheese industry, giving the evidence of one Mr. Carr before the tariff board. He said that he represented a creamery association in the province of Ontario, and made this statement:

The creamery industry in Ontario at present is in a very serious condition, not only from the demoralizing influence on our butter market but, in the main, from an absolute lack of market owing to the influx of New Zealand butter.

That is the evidence of the gentleman who is applying to the tariff board for an increased tariff on butter.

My hon. friend from Yale (Mr. Stirling) quoted a few minutes ago from the statement of the National Dairy Council. I have here an address made by the secretary of the National Dairy Council, speaking to a dairymen's association in London, Ontario, on March 5th last. He begins by saying:

The dairy industry of Canada is sound.

He does not say that the dairy industry is in a ruinous condition when he is addressing a dairymen's association. He goes on to tell them how to better the condition of the dairy industry, which he states is in a sound condition already. One would suppose that if the statements made by my hon. friend to

my right were absolutely correct, the first thing Mr. Stephen would have told the association was that the dairy industry in Canada was in a bad condition owing to the ruinous competition of New Zealand butter, but he makes no suggestion of that kind at all. He says:

To better the situation-

He does not suggest excluding New Zealand butter, but says:

To better the situation, increase production by herd improvement. This is the dairymen's part in cooperation with the departments of agriculture; more cow efficiency is needed. The manufacturer's part is to consolidate our creameries, also cheese factories.

Incidentally he suggests a duty of 7 cents a pound on butter, with a preference of 3 cents a pound to Australia and New Zealand. As a protectionist, acting on instructions probably from the National Dairy Council, he had to say, as a matter of course, that protection was needed, but in his view the great thing to do for the dairy industry was not so much to exclude New Zealand butter as to increase the efficiency of the dairy herds and find better methods of production.

My hon. friends to my right have not got the whole facts. I do not think that they intentionally withheld any facts, but one thing they did not tell us, and that is what became of this New Zealand butter when it got into Canada. Let us examine the situation and see what became of a large part of this New Zealand butter which was imported into Canada. My hon. friend from Yale last year made a statement in this house which was very valuable and which put me on track, if I may use a slang phrase, that there was something beneath this butter question that we did not know. He said that large quantities of New Zealand butter were being imported into Canada by the creameries-the very men who are complaining-and that this butter was made over and packed and sold in their own commercial brands without any indication on the package of the country of origin. I investigated in order to find out who the sinners were who were doing this thing. At that particular time we asked the Minister of Agriculture (Mr. Motherwell) if the cardboard cartons in which the butter is packed could not contain the country of origin in the same way as when you go into a store in Ottawa you will see the label on different goods, "Made in Germany," or "Made in Czechoslovakia". We asked at that time that all butter brought from New Zealand and Australia should have on the carton the words "Made in Australia" or "Made in New Zea-

Australian Treaty-Mr. Adshead

land," but for some reason or other the minister has not seen fit to accept that suggestion, and to-day we see that the creameries in Canada, the very men who are complaining of the importation of New Zealand butter, are the very ones who are importing it. Would they import New Zealand butter to ruin their own trade? Does that seem sensible? Is it likely that they would import New Zealand butter if it brought their own trade into the condition that my friends to my right would have us believe the dairy industry in Canada is in? I wrote to the Department of Agriculture to find out something about the packing of butter in commercial cartons, and I wish to read a letter that I received; which is very informative, and bears strictly on this question. It is addressed by Mr. Ruddick, dairy and cold storage commissioner, to myself, and reads:

The Deputy Minister of Trade and Commerce has referred to me your inquiry with regard to the sale of New Zealand and Australian butter in Canada.

The dairy produce inspectors employed by this branch of the Department of Agriculture have checked the sale of Australian and New Zealand butter closely during the last two years and have not found any of this butter sold as Canadian butter. The creameries-

Mark you, these are the very gentlemen who are complaining of the importation of New Zealand butlter:

The creameries, jobbers and retailers have sold most of the New Zealand butter in wrappers bearing their regular commercial brands which do not give any indication as to the creamery or country in which the butter is made, and that is quite within the law.

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

Does not the law require the package to indicate that it is imported butter, not necessarily the country of origin?

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LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

Mr. Ruddick says that the wrappers do not give any indication as to the creamery or country in which the butter is made. In other words, it gives no indication that the butlter is imported; it is put up in packages similar to those in which our Canadian butter is sold, so that a person buying this butter, say, in Toronto or Calgary, imagines it is Canadian butter. I spoke to my own retail grocer about this some time ago. He said, "I have no doubt that I have sold hundreds of pounds of New Zealand butter here, but it is packed in the same packages as those in which we get Canadian butter." This, it is said, is quite within the law, but to my mind it is a legal fraud. He goes on to say something else:

While it would be against the law to brand New Zealand or Australian butter as Canadian,

I cannot see how it would do any harm to the Canadian industry, because New Zealand butter is of excellent quality and to sell it as Canadian would really be an advertisement for Canadian butter.

I cannot see the force of that particular argument.

For the same reason it would not be wise to require that all New Zealand butter should be branded as such.

I differ of course with the dairy commissioner on that point.

The only result of such a requirement -would be to advertise New Zealand butter.

If that argument is sound, then we should not insist on the country of origin being placed on imports from United States and other countries. I remember when years ago Joe Chamberlain was instrumental in putting legislation through the British House of Commons requiring all imported goods to be marked with the country of origin, the Germans sent their magnificent liner, the Deutschland, up the Thames with the words "Made in Germany" prominently displayed.

Canadian dealers are not anxious to do this because they look upon the sale of New Zealand or Australian butter as a temporary matter. New Zealand and Australian butters are not made over in this country.

Then follows what I would term a distinction without a difference.

There is no making over to be done. What they do is to rework the butter slightly to pack it in the right sized boxes for cutting into one pound prints.

I can hardly see the difference between remaking and reworking, but I suppose there is a difference.

I have heard it said that New Zealand butter was reworked for the purpose of adding water. The New Zealand butter makers are too skilful to export butter that would permit of any water being added without exceeding the legal limit of 16 per cent,-

Perhaps they might object to pay freight on water, of which we have plenty here.

-which is the standard for New Zealand, Australia and Canada. If, however, anyone bad New Zealand or Canadian or any other butter which was so low in moisture content that it would pay to add water to bring it up to the standard, there would be no legal objection to doing so. All good butter makers work close to the limit of 16 per cent. It is part of the business of the butter maker to regulate the water in butter, but if he exceeds the limit of course he gets into trouble.

So if New Zealand exported butter to Canada, and did not want to pay freight on water, our good Canadian creameries would add so much water and would get so much a pound for the made-over product. So much

382 COMMONS

Australian Treaty-Mr. Adshead

for the New Zealand butter. What becomes of it when it enters Canada? It is made over, packed in Canadian packages and sold without anything appearing on the package to show that it is New Zealand butter.

I wrote to the commissioner of customs to ascertain what became of some of this butter, and I found that a large number of our creameries imported this butter in bond, then sliced it and put it in their own packages for shipment to the West Indies and other places. The people who purchased that butter no doubt thought it was Canadian butter. Let me give the house some figures furnished to me by Mr. Breadner, commissioner of customs, on August 12th 1929. I simply want to show what becomes of a large part of this New Zealand butter imported into Canada. He says that for the fiscal year ending March 31, 1929, Nova

Scotia imported 8,381 cwt., or 419| tons. Now, what became of that butter? My hon. friends here would say that it came in competition with Canadian butter, and helped to lower the price obtained by our dairymen. Of this amount Nova Scotia exported from bond without payment of any duty, 222 tons.

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?

An hon. MEMBER:

Who exported it?

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LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

A certain amount was

exported from New Brunswick and a small amount from British Columbia. So that a large part of this butter was not even sold in Canada, but was exported to other countries and sold virtually as Canadian butter. Mr. Breadner also says that some of the creameries did pay a duty and then got a drawback. He says:

In your letter you specifically mention drawback on imported butter which is worked over and subsequently exported. The following statement gives the quantity of butter imported in bulk into Canada during the fiscal years

1927- 28 and 1928-29 and sliced, packaged and exported to the British West Indies.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

How much was exported?

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LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

That was in 1927-28 and

1928- 29. That was the butter on which the importers paid duty. I gave the figures of the butter imported and dealt with in bond.

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CON
LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

Nova Scotia imported

419J tons and exported from bond without payment of duty 222 tons. From those figures alone it will be seen that a very large quantity of this New Zealand butter was brought in by the creameries themselves. Of course, it did not injure their particular trade because thep exported a considerable quantity of it,

but the cry has gone up that all this New Zealand butter was sold to the Canadian people in ruinous competition with the butter of our own creameries.

There is another point to be considered in this connection. No consideration has as yet been expressed for the consumers, none whatever. What about the consumers, what about the workingmen who have to buy this butter? Surely to goodness at the present time if a workingman pays 50 cents a pound for butter in Calgary that is enough.

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CON

Leslie Gordon Bell

Conservative (1867-1942)

Mr. BELL (Hamilton):

Do you think the farmer is gouging the workingman?

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LAB
CON
LAB

Herbert Bealey Adshead

Labour

Mr. ADSHEAD:

Since my hon. friend has asked the question, I will tell him of an incident that happened in my own constituency. I have a dual constituency. In it there is a large number of farmers and a large number of working men. About the time this duty on New Zealand butter coming into Canada came into force, I attended a fairly large convention of dairy farmers, and I said this to them: You have always wanted free trade, and you have always striven to have the duty cut on agricultural implements, and you have succeeded. You have succeeded in having the duty cut on your automobiles, and you have had the duty on binder twine thrown off, and so forth. You are free traders and low tariff men, and now because you have the opportunity do you want to raise the price o.f your butter?? Do you want me to go down to the Ogden shops where five hundred or a thousand men are engaged and tell them that you want to raise the price of butter to 55 or 60 cents in place of the 50 cents they are now paying? If that is the message you want me to take to these men you had better get someone else to take it.

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CON

Isaac Duncan MacDougall

Conservative (1867-1942)

Mr. MACDOUGALL:

Although some of

us suspect the hon. gentleman to be a very strong Liberal, he poses as a labour man in this house-

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LAB

March 7, 1930